The idea of the liberal democratic nation-state appears to be experiencing one of the periodic economic crises of legitimacy that are a hallmark of the modern era. In living memory, we recall the challenge to the post-war welfare state posed by neoliberal economic theory in the 1970s and 1980s, even as more recently we have witnessed the neoliberal post-Cold War consensus splintering under the pressure of political populism and economic nationalism. In contrast to the Continental tradition of the Rechstaat or ‘Legal State’ generally thought to have been inaugurated by Immanuel Kant, the Anglo-American liberal tradition typically has been reluctant to identify a dominant theory of the state. We are now arguably very much in need of one, or at least we need to begin to think through what the economic elements of a liberal theory of the state should entail. This study proposes that there is genuine value in looking back to the intellectual foundations of British political economy in the ‘classical’ liberal period in the seventeenth to the early nineteenth centuries in hope of better understanding the possibilities and challenges confronting liberal democracies in our times.

The origins and history of liberalism have been the subject of considerable interest of late. And there have been valuable recent studies that illuminate particular aspects of early modern political economy, such as the concept of risk, charity and political corruption. There has also been renewed focus on the extent to which economic concepts such as propriety and self-ownership have long been embedded in the normative foundations of liberal political theory. However, the present project is guided by a different set of conceptual concerns and theoretical questions. I operate on the assumption that the primary reason for the continuing relevance of classical liberal thought is the widely held view that it is the philosophical inspiration for the neoliberal economic theory influential today. Contemporary neoliberalism is a somewhat nebulous concept, and one which has few self-admitted subscribers, but at its core it is frequently identified with the position that the economic realm has moral primacy over political life in the sense that political institutions are legitimate in the extent to which they contribute to the creation and functioning of markets driven by the free choice of individuals, not as fellow citizens, friends, parents or colleagues, but as economic agents: consumers, producers and investors.